Marcus & Millichap (NYSE: MMI) and Kennedy-Wilson Holdings (NYSE:KW) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitabiliy, earnings, analyst recommendations, risk and institutional ownership.

Dividends

Kennedy-Wilson Holdings pays an annual dividend of $0.68 per share and has a dividend yield of 3.5%. Marcus & Millichap does not pay a dividend. Kennedy-Wilson Holdings pays out 377.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kennedy-Wilson Holdings has raised its dividend for 6 consecutive years.

Earnings & Valuation

This table compares Marcus & Millichap and Kennedy-Wilson Holdings’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Marcus & Millichap $706.39 million 1.46 $105.37 million $1.54 17.53
Kennedy-Wilson Holdings $719.80 million 3.09 $234.80 million $0.18 108.34

Kennedy-Wilson Holdings has higher revenue and earnings than Marcus & Millichap. Marcus & Millichap is trading at a lower price-to-earnings ratio than Kennedy-Wilson Holdings, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Marcus & Millichap and Kennedy-Wilson Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Marcus & Millichap 8.51% 23.27% 16.08%
Kennedy-Wilson Holdings 3.13% 2.28% 0.69%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Marcus & Millichap and Kennedy-Wilson Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marcus & Millichap 0 3 0 0 2.00
Kennedy-Wilson Holdings 0 2 3 0 2.60

Marcus & Millichap currently has a consensus price target of $27.00, suggesting a potential upside of 0.00%. Kennedy-Wilson Holdings has a consensus price target of $29.67, suggesting a potential upside of 52.14%. Given Kennedy-Wilson Holdings’ stronger consensus rating and higher probable upside, analysts clearly believe Kennedy-Wilson Holdings is more favorable than Marcus & Millichap.

Volatility & Risk

Marcus & Millichap has a beta of 1.55, suggesting that its share price is 55% more volatile than the S&P 500. Comparatively, Kennedy-Wilson Holdings has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500.

Insider & Institutional Ownership

42.4% of Marcus & Millichap shares are held by institutional investors. Comparatively, 81.8% of Kennedy-Wilson Holdings shares are held by institutional investors. 58.3% of Marcus & Millichap shares are held by company insiders. Comparatively, 17.1% of Kennedy-Wilson Holdings shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Kennedy-Wilson Holdings beats Marcus & Millichap on 10 of the 17 factors compared between the two stocks.

About Marcus & Millichap

Marcus & Millichap, Inc. is a brokerage company specializing in commercial real estate investment sales, financing, research and advisory services. The Company offers three primary services to its clients: commercial real estate investment brokerage, financing, and ancillary services, including other research, advisory and consulting services. It provides its financing services through Marcus & Millichap Capital Corporation, which is a broker of debt financing for commercial properties. Its research, advisory and consulting services are designed to assist clients in forming their investment strategy and making transaction decisions. Its advisory services include opinions of value, operating and financial performance benchmarking analysis, and specific asset buy-sell strategies. As of December 31, 2016, the Company had over 1,700 investment sales and financing professionals in 82 offices in the United States and Canada that provide investment brokerage and financing services.

About Kennedy-Wilson Holdings

Kennedy-Wilson Holdings, Inc. is a real estate investment company. The Company owns, operates, and invests in real estate both on its own and through its investment management platform. The Company focuses on multifamily and commercial properties located in the Western United States, the United Kingdom, Ireland, Spain, Italy and Japan. The Company’s segments include KW Investments, and KW Investment Management and Real Estate Services (IMRES). KW Investments invests in multifamily, residential and commercial properties, as well as loans secured by real estate. IMRES provides real estate-related services to investors and lenders, with a focus on financial institution-based clients. As of December 31, 2016, the Company had an ownership interest in approximately 39 million square feet of property globally, including 25,943 multifamily rental units.

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